After Capacity Agreements have been awarded for each Auction, Capacity Providers have certain obligations and rights. The obligations that need to be fulfilled will depend on the Capacity Market Unit (CMU) type. See below for more information on the requirements for each CMU type.
Prospective CMUs (New Build & Refurbishing
CMUs) have obligations relating to the progress of their project delivery
before they are commissioned and operational. These obligations ensure that the
project will be ready to deliver for the relevant Delivery Year to which their Capacity Agreement relates and for the
duration of that Agreement.
Existing CMUs are sites that are already
established, commissioned and operational. Existing CMUs are required to ensure
that they can deliver during the relevant Delivery Year to which their Capacity
Demand side response (DSR) CMUs are categorised into proven and unproven depending on the status of the unit at the
time they prequalify. A proven DSR has an obligation to ensure that they can
deliver during the relevant Delivery Year to which their capacity agreement
relates. An unproven DSR has the same
obligation but must first complete a test to confirm that it is operational.
Capacity Agreement can be terminated if a CMU fails to meet its key obligations
outlined in the CM Rules. The DB issues a Termination Notice to the Capacity
Provider when a Termination Event occurs. Capacity Providers then have the
option to either submit a dispute to the Delivery Body or send a request to the
Secretary of State to either have the Termination Notice withdrawn or extended.
Market participants face a risk of being penalised should they be unable to meet their Capacity Obligation. This risk
could be mitigated pre-emptively either through 'Secondary Trading' their
capacity obligation to another provider or after a stress event through 'Volume
Reallocation‘ to another provider.
Providers are able to request the Delivery Body to review the following for any
of their CMUs:
request to change address for any prospective or DSR CMU;
a security interest;
a CMU to another company;
request to investigate a factual inaccuracy on any relevant Capacity Market
Register or Capacity Agreement.
Guidance documents for each of the Agreement Management activities can be found in the document library. Select 'guidance' below to access these documents.
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